A Parent Is Not Absolved from a Costs Disposition Simply Because He Or She Is the Custodial

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Costs

Ability to Pay –Must consider this in awarding costs. MacDonald v. Magel. (2003) 67 O.R. (3d) 181. In Murray2005 CanLII 46626 (ON C.A.), the court found that a costs award would have a devastating effect on the mother and it would likely destroy whatever chance she may have to achieve financial self-sufficiency. No costs were ordered. Followed in Chouinard 2009 CanLII 64817 (ON S.C.).

A parent is not absolved from a costs disposition simply because he or she is the custodial parent, particularly where the court is not persuaded that the child’s best interests would be negatively affected.In this case, the fact that the husband was a custodial parent was a relevant factor. However, the impact of a costs disposition on the children would be, at most, minimal in light of their circumstances.Cassidy v. McNeil, 2010 ONCA 218 (CanLII).

A party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs, particularly when they have acted unreasonably and are the author of their own misfortune.Snih v. Snih, 2007 Canlii 20774 (Ont. SCJ pars. 7-13). In the case of Takis v. Takis, [2003] O.J. No. 4059 (S.C.J.) the court found that the respondent’s lack of income and assets, though a relevant consideration, could not be used as a shield in unnecessary litigation.

Must also consider the impact on the payor’s child support obligations. Brusch [2007] O.J. No. 3349.In Van Rassel v. Van Rassel, 2008 CanLII 56939 (ON S.C.), [2008] O.J. No. 4410, 61 R.F.L. (6th) 364 (S.C.J.) at para. 9 Mossip J. concluded that the court should also consider the financial means of the unsuccessful party including the issue of the impact on the child of the paying party of a large costs order. Note that in Spears v. Spears 2010 ONSC 4882, the court made a sizeable costs order against a mother on social assistance. The court considered that she earned cash income from babysitting and received gifts of $2000 per month.

Bad Faith –There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. The court can determine that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated. S.(C.) v. S. (M.) (2007), 38 R.F.L. (6th) 315 (Ont. SC). Where, as here, a party adopts a catch-me-if-you-can approach to financial disclosure, thereby demonstrating bad faith, that fact overshadows everything else such that full-recovery costs should follow. Not every failure by a party to disclose information in a timely fashion constitutes bad faith within the meaning of subrule 24(8). The non-disclosure must relate to a fact material to the litigation with the intention of deceiving a party or the court on this material issue.Montrichard v. Mangoni, 2010 ONCJ 408 (CanLII).

Where a party is found to have committed perjury this is bad faith, and the ability to pay provisions (MacDonald v. Magel) do not have the same applicability. Achakzad v. Zemaryalai, 2011 ONCJ 721 (CanLII).

Where there is a finding of bad faith, full indemnity costs is the starting point. However, other factors could impact on the decision. Izyuk v. Bilousov, 2011 ONSC 7476 (CanLII).

Bar to Proceeding – It is an error to bar a parent from seeking access on the sole ground of unpaid costs without considering the amount of costs, the reasons they were unpaid, and the parent’s ability to pay. Pepper v. Frankum, 2007 ONCA 429 (CA).Trudel v. Trudel, 2010 ONSC 5177 (CanLII).

Child Protection –

Hastings Children’s Aid Society v. J.L., 2012 ONCJ 362 (CanLII)

The essential test for the appropriateness of an award of costs against a Society is whether the Society should be perceived by ordinary persons as having acting fairly. See:Children’s Aid Society of Niagara Region v W.D. (2004) 1 R.F.L. (6th) 117 (Ont Div Ct) -

Courts should be very cautious about awarding costs against parents in CAS matters – Kenora- Patricia v. A.M. 2005 O.J. 5305. The society should not be penalized in costs when it is attempting to carry out its statutory mandate to protect children. 3 factors set out in CAS York Region v. J.E. 2007 Canlii48984 (SC)

1.Costs against a society should only be awarded in exceptional circumstances.

2. Exceptional circumstances include the conduct by the society that is seen as patently unfair by the public at large.

3. Costs may be awarded against a society even absent bad faith.

Child protection agencies should not be penalized for attempting to fulfill their mandate, unless they have acted in some indefensible manner (See: Children’s Aid Society of Ottawa-Carleton v. V., 2001 CarswellOnt 1991; Children’s Aid Society of Algoma v. M. (R.) (2001), 18 R.F.L. 5th 36 (Ont. C.J.)), or have acted in a way where it would be perceived by an ordinary person as having acted unfairly (See: Children’s Aid Society of Niagara Region v. B. (C.) 2005 CarswellOnt 4414 (SCJ).

A Society has the following obligations:

1. Conduct a thorough investigation before acting.

2. Consider alternative measures for the protection of children before proceeding to court.

3. Continue its investigation up until the time of a final court determination in a vigorous, professional manner.

4.Treat all clients fairly and equally and with as much dignity as possible.

5.Reassess its position as more information becomes available.

6.Ensure that its workers are skilled in the performance of their roles.

B.(C.) v. Alberta (Director of Child Welfare), 2008 CarswellAlta 341 (Alta.QB).

Children’s Lawyer –Possible to order costs if unreasonable position. See: CAS of St. Thomas and Elgin County v. L.S. (2004) 46 R.F.L. (5th) 330 (OCJ), but generally courts have been reluctant to make these orders. See: Durham CAS v. E.C.G. (2005) 6 R.F.L. (6th) 251 (Ont. Div. Ct.), CAS of Peel Region v. K.J.F. 2009 ONCJ 252.

City- Social Services – Can order them to pay blood test results when they are the real litigant. D.N. 2004 (OCJ- Justice Cohen). See contra Bristow v. Keats 2006 ONCJ 14. Detailed test now set out in Elliott v. Dalbergs 2010 ONSC 7072 (Ont. SCJ).

Family Responsibility Office Clause:The entire amount of costs may be enforced as an incident of support by the Family Responsibility Office. The clause should say “payable as support”. The advantages of an order under this provision are that the costs award is enforceable by the Family Responsibility Office and the order is not discharged in a bankruptcy by virtue of s.178(1)(c) of the Bankruptcy Act.“It seems to me to be both impractical and inappropriate to suggest that this court should attempt to dissect cost awards in order to determine which part of the award relates to the support aspect of the proceedings.”Wildman 2006 Canlii (OCA).

The court has discretion to allocate what portion of the costs are attributable to support. Sodhi v. Sodhi ONCA 665 Canlii.

Good Faith – Where both parties litigate issues in good faith out of genuine love for the child and the result is far from certain (here mobility to Fiji) no costs awarded. Reid v. Mulder [2006] 29 RFL 120.

A misguided, but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. If they should know by their actions that they are running up legal costs and causing the other party financial ruin without justification, that is bad faith. S.(C.) v. S.(M.)38 RFL6th315 (SCJ).

Hourly Rate – Zesta Engineering Ltd. V. Cloutier (2002) , 21 c.c.e.l. (3D) 161 (ONT.CA.) Costs awards should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant. Cited in Thompson v. Thompson (2006) 22 RFL (6th) 54 (Sup) court says that it is not appropriate to simply take the number of hours spent by counsel on a particular matter and multiply those hours by a determined hourly or per diem rate.

Interim Costs and Disbursements:Rogers J. summarized some of the themes permeating the jurisprudence in Stuart v. Stuart[2001] O.J. No. 5172 (Ont.S.C.) at paragraph [8]:

1)The ordering of interim disbursements is discretionary: Airst v. Airst, [1995] O.J. No. 3005 (Ont. Gen. Div.); Hill v. Hill (1988, 63 O.R. (2d) 618 (Ont. H. C.) and Lossing v. Dmuchowski, [2000] O.J. No. 837 (Ont. S.C.J.).

2)A claimant must demonstrate that absent the advance of funds for interim disbursements, the claimant cannot present or analyse settlement offers or pursue entitlement: Hill v. Hill, (1988), 63 O. R. (2d) 618 (Ont. H.C.) and Airst v. Airst, [1995] O.J. No. 3005 (Ont. Gen. Div.).

3)It must be shown that the particular expenses are necessary: Lossing v. Dmuchowski, [2000] O.J. No. 837 (Ont. S.C.J.).

4)Is the claim being advanced meritorious? Lynch v. Lynch, (1999), 1 R.F.L. (5th) 309 (Ont. S.C.J.) and Randle v. Randle1999 ABQB 954 (CanLII), (1999), 3 R.F.L. (5th) 139 (Alta. Q.B.).

5)The exercise of discretion should be limited to exceptional cases: Organ v. Barnett (1992), 11 O.R. (3d) 210 (Ont. Gen. Div.).

6)Interim costs in matrimonial cases may be granted to level the playing field: Randle v. Randle1999 ABQB 954 (CanLII), (1999), 3 R.F.L. (5th) 139 (Alta. Q.B.).

7)Monies might be advanced against an equalization payment: Zagdanski v. Zagdanski, 2001 Carswell Ont. 2517 (Ont. S.C.J.).

Legal Aid – The court is not restricted to ordering costs at a legal aid rate. Ramcharitar v. Ramcharitar (2002) 62 O.R. (3d) 107 (Ont. SCJ), Holt v. Anderson [2005] O.J. No. 5111 (Div. Ct.)

Mobility Cases – When a moving party is successful on a mobility case, but has put the other party in the position of having little option but to contest the case, the court should be reluctant to grant costs. Bridgeman v. Balfour, 2009 CarswellOnt 7214 (Ont. S.C.J.):However, where the move was from one town to another within Niagara. And the parent’s relationship would not be affected with his child at all, Bridgeman was distinguished.See:DeLuca v. DeLuca, 2010 ONSC 6692 (CanLII).

Non-Parties – The test for awarding costs against non-parties is:

a) the non-party had status to bring the action;

b) the named plaintiff was not the real plaintiff;

c) the plaintiff was a “man of straw” put forward to protect the non-party from liability for costs – See: Television Real Estate Ltd. V. Rogers Cable T.V. Ltd. (1997) 34 O.R. (3d) 291 (Ont.CA).

Offers to Settle –Offers to settle are the yardstick with which to measure success and are significant both in considering liability and quantum. Osmar v. Osmar (2000) 8 R.F.L. (5th) 387 (Ont. SCJ).

Even if the terms of subrule 18(14) are followed, the court still has the discretion not to order full recover costs. C.A.M v. D.M. [2003] (OCA).

Failure to make an offer to settle can be unreasonable behaviour. Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774 (CanLII).

Offers in Settlement Conference Briefs - Subrule 17(23) of the Family Law Rules is clear that no brief, evidence or statement made at a settlement conference is to be disclosed unless in an agreement reached at a settlement conference or an order. There is no exception for the offers to settle in a settlement conference brief to be disclosed in submissions for costs. See Entwistle v. MacArthur, 2007 CanLII 17375, 157 (Ont. Fam. Ct.).

The value of severable offers

Severable offers are an underused tool that can confer considerable settlement and cost advantages. Because of the full recovery provisions of Rule 18(14), they can provide much more flexibility to the court to award full recovery for at least a portion of the overall costs, if the party is successful on only some of the issues. Had the custody terms of the wife’s offer been severable from the other terms, I would have been prepared to consider ordering full recovery costs on the custody issue from the date of the offer forward. As this was the majority of the trial time, that would have been a significant cost advantage to the wife. Paranavitana v. Nanayakkara, 2010 ONSC 2257 (CanLII).

Proportionate /Reasonable Expectation:Costs must be proportionate to the amount at stake. Gentle 2007CarswellOnt 4362 (S.C.)

The court must step back and exercise a judgment, having regard to all the circumstances as to what a fair and reasonable amount should be paid by the unsuccessful party rather than any exact measure of the actual costs to the successful litigant is. See Boucher v. Public Accountants Council for the Province of Ontario2004 CanLII 14579 (ON C.A.), (2004) 71 O.R. (3d) 291. Cited with approval in Serrav.Serra, 2009 ONCA 395 (CanLII).

In Cimmaster v. Piccione,2010 CanLII 846 (ON S.C.), at para. 19 a civil action, Gray J. stated:

…The principle of proportionality is important, and must be considered by any judge in fixing costs. … However, in my view, the principle of proportionality should not normally result in reduced costs where the unsuccessful party has forced a long and expensive trial. It is cold comfort to the successful party, who has been forced to expend many thousands of dollars and many days and hours fighting a claim that is ultimately defeated, only to be told that it should obtain a reduced amount of costs based on some notional concept of proportionality. In my view, as was the case in Pitney Bowes, the concept of proportionality appropriately applies where a successful party has over-resourced a case having regard to what is at stake, but it should not result in a reduction of the costs otherwise payable in these circumstances.

Cited in: Wimalaratnam v. Wimalaratnam, 2011 ONSC 2086 (CanLII)

One of the considerations in an assessment of costs is to fix costs in an amount that is “fair and reasonable” for the unsuccessful party to pay in a particular proceeding:Farjad-Tehrani v. Karimpour 2009 CarswellOnt 2186 (S.C.J.) at para. 32, aff’d 2010 O.N.C.A. 326 at para. 4.

Purposes – Modern cost rules reflect a variety of purposes:

1. Indemnity
2. Controlling behaviour by discouraging frivolous suits or meritorious defences,
3. To promote and encourage settlements.

Fong v. Chan [1999] O.J. No. 4600 (ont. CA)

Also: The ONCA in Serra v. Serra, [2009] O.J. 1905 confirmed that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.

Skramrud, 2008Canlii 736 (SC) –the fixing of costs does does not begin or end with the calculation of hours multiplied by rates. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case. The expectation of the parties concerning the amount of costs is also a relevant consideration.

Relevant Matters – 24 (11) (f):Subrule 18 (16) (offers to settle) can be considered here as a cross-reference. It not only goes to entitlement, but also to quantum. Osmar [2000] O.J. No. 2504 (SCJ).

Reserving Costs – Don’t as a rule – Lawson v. Lawson 2004 Carswell Ont 3154 (Ont.S.C.)

Responsibility for Behaviour -Family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141.

Rule 2 - Subrule 2 (2) of the Family Law Rules (the rules) adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. This provision needs to be read in conjunction with rule 24 of the rules. Subrule 2 (4) of the rules states that counsel have a positive obligation to help the court to promote the primary objective under the family law rules. Clauses 2 (3) (a) and (b) of the rules set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saving time and expense. Sambasivam v. Pulendrarajah, 2012 ONCJ 711 (CanLII).

Scale of Costs – A party is not generally entitled to full recovery costs unless there has been bad faith or Rule 18 applies. Substantial indemnity costs have been defined as about 80% of total costs; partial indemnity costs at 60%. Kimpton v. Ghoura, 2007 CarswellOnt 1927 (SCJ); Biant v. Sagoo 2011 CarswellOnt 3315 (SCJ); Burke v. Burke, 2011 CarswellOnt 3051 (SCJ). Partial indemnity costs should be the norm. Patton-Casse v. Casse, 2011 CarswellOnt 7090 (SCJ); Blustein v. Kronby, 2010 CarswellOnt 1985 (SCJ).

Civil Rules Tariff (as of 2012): law clerks – max $80 per hr., student-at-law-$60, under 10 year lawyer- $225, 10-20 year lawyer - $300 per hr., and plus 20 lawyer - $350 per hr. The maximum rate may be considered and slightly reduced where counsel was experienced, but the case was not complicated enough to warrant the highest rate. Al v. Lawson, 2010 CarswellOnt 7807 (SCJ).

Second Counsel – Usually not recoverable for two counsel at trial. Sepiashvili v. Sepiashhviili, 2001 CarswellOnt 3459 (SCJ).

Self-represented litigants –

In Jahn-Cartwright 2010 91 R.F.L. (6th) 301 (Ont. S.C.J.) and Cassidy v. Cassidy201192 R.F.L. (6th) 120(Ont. S.C.J.) the court found:

a. The entitlement to costs and the appropriate amount to be paid is within the court’s discretion.

b. Rule 24(1) of the Family Law Rules creates a presumption of costs in favour of the successful party.

c. In setting the amount of costs, the court must try to indemnify the successful party while avoiding an overly onerous costs burden for the unsuccessful party which would jeopardize access to justice.

d. For many years indemnification of a successful party was considered the only objective, and this was held to preclude an award of costs to a successful self-represented litigant who had not paid fees for which they needed to be indemnified. But while indemnification remains a paramount consideration in awarding costs, it is not the only one.

e. In both Fong v. Chan and more recently in Serra v. Serra 2009 ONCA 395 (CanLII), 2009 ONCA 395, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:

1. To partially indemnify successful litigants for the cost of litigation;

2. To encourage settlement; and

3. To discourage and sanction inappropriate behaviour by litigants.

f. Access to justice has been recognized as a further objective that the court should seek to achieve when awarding costs. (1465778 Ontario Inc. V. 1122077 Ontario Ltd, 2006 CanLII 35819 (ON CA), 2006 CanLII 35819, (2006) 82 O.R. (3d) 757 (Ont. C.A.)).

g. A party with counsel, opposite an unrepresented litigant, should not perceive that they are immune from a costs award merely because such opposite party is unrepresented. They should be discouraged from presuming they will face only nominal costs.

h. The right of a self-represented litigant to recover costs is not automatic. Quantification of those costs may be difficult. But without the option of awarding meaningful costs to self-represented litigants, the court’s ability to encourage settlements and discourage inappropriate behaviour will be greatly diminished.

i. Determination of costs for self-represented litigants should take into account all of the objectives which costs orders should promote. Rules 18 and 24 of the Family Law Rules apply. Otherwise the resulting amount can render the entitlement to costs illusory; undermine access to justice by self-represented litigants; and frustrate the administration of justice.